Banking Risk and Finance Management on Quality Data

Building a unique solution to cover the risk and finance reporting with PwC

European banks face increasing regulatory demands for reporting their financial and risk situation. Additionally banks must monitor internal performance and prepare additional reports for their own purposes. This places banks under scrutiny from regulators, who assess the quality and consistency of reports, and shareholders, who evaluate the efficiency of supporting functions, including Finance and Risk departments. PwC understands these challenges and offers comprehensive solutions to satisfy regulators and shareholders simultaneously.

Reports in scope

Our comprehensive solution addresses risk and finance reports starting with those from the EU, followed by reports at the national level, and finally includes internal reporting to complete the delivery.

Finance

FINREP - Consolidated Financial Reporting framework for supervisory purposes
IFRS - International Financial Reporting Standards
BSI - Balance sheet items
MIR - Monetary Financial Institution Interest Rate Statistics
EMIR - Reporting of all derivatives to Trade Repositories
SHS - Statistics on holdings of securities
Internal financial performance reporting
Internal financial performance of the bank in product, client and sales force dimensions

Risk

COREP - Common reporting framework to report solvency ratio to supervisory authorities under the Capital Requirements Directive
Anacredit - Information on individual bank loans
SRB - Single resolution board reporting
IRB - Reporting the validation results of internal models
AQR - Asset quality review
EBA benchmarking - Benchmarking of credit risk, market risk and IFRS9 models
EBA stress testing - Assess the resilience of financial institutions to adverse market developments
BCBS239 - Principles for effective risk data aggregation and risk reporting
Internal risk reporting
Internal reporting of risks to the bank management

Bank problem

Many bank teams are involved and significant effort spent to:

Run database infrastructure
Prepare source data for each report
Clean it
Make manual corrections
Report it

Despite it, quality issues and mutual inconsistencies arise in the reports.

Our capabilites

PwC has at your disposal a team experienced in:

EU regulatory reporting
Local regulatory reporting
Internal risk reporting
Business data understanding
Risk management and modelling
Data architecture and delivery

Our approach

Building a unique solution to cover the risk and finance reporting

EU compliant cloud platform infrastructure - MS Azure or Amazon AWS
Unified data set for financial and risk internal and regulatory reporting - PwC data model extension of BIRD
Automated data quality controls and their reporting
Process and tools to make and document manual corrections
Common cloud reporting platform

This solution saves the effort spent on regulatory and internal reporting and improve the reporting quality and consistency.

Data model

PwC data model extension of BIRD
Logical data model with the needed attributes of the main entities:

Rating,
Party,
Instrument,
Agreement,
Credit Facility,
Collateral,
Security and Derivative,
Securitisation,
Non-financial asset and liability.

Solution description

Banks usually have enterprise data warehouse storing the granular data in a common banking model. This is the right source for Risk/Fin common reporting layer.

If it is not the case, PwC can help to create the data warehouse for the data needed for Risk/Fin reporting.

Exceptionally, some data sources can be loaded directly into Risk/Fin common reporting layer.

The core of the solution is Risk/Fin common reporting layer. It is based on BIRD data model enriched by PwC to cover the data needed for all the reporting. The reporting layer is equipped with Corrections application enabling to propose and to approve corrections in the data and to track them for an audit purpose. The corrections on the common data are realized just once and therefore the same way for all the reports.

Individual Risk and Fin data marts for different reporting purposes are then derived from the common quality data.

The solution can be hosted on MS Azure or Amazon AWS cloud or implemented specifically in a local bank infrastructure.